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Tag: data privacy

  • Reddit’s Sale of User Data for AI Training Draws FTC Investigation

    Reddit’s Sale of User Data for AI Training Draws FTC Investigation

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    Reddit said ahead of its IPO next week that licensing user posts to Google and others for AI projects could bring in $203 million of revenue over the next few years. The community-driven platform was forced to disclose Friday that US regulators already have questions about that new line of business.

    In a regulatory filing, Reddit said that it received a letter from the US Federal Trade Commision on Thursday asking about “our sale, licensing, or sharing of user-generated content with third parties to train AI models.”

    The FTC, the US government’s primary antitrust regulator, has the power to sanction companies found to engage in unfair or deceptive trade practices. The idea of licensing user-generated content for AI projects has drawn questions from lawmakers and rights groups about privacy risks, fairness, and copyright.

    Reddit isn’t alone in trying to make a buck off licensing data, including that generated by users, for AI. Programming Q&A site Stack Overflow has signed a deal with Google, the Associated Press has signed one with OpenAI, and Tumblr owner Automattic has said it is working “with select AI companies” but will allow users to opt-out of their data being passed along. None of the licensors immediately responded to requests for comment. Reddit also isn’t the only company receiving an FTC letter about data licensing, Axios reported on Friday, citing an unnamed former agency official.

    It’s unclear whether the letter to Reddit is directly related to review into any other companies.

    Reddit said in Friday’s disclosure that it does not believe that it engaged in any unfair or deceptive practices but warned that dealing with any government inquiry can be costly and time-consuming. “The letter indicated that the FTC staff was interested in meeting with us to learn more about our plans and that the FTC intended to request information and documents from us as its inquiry continues,” the filing says. Reddit said the FTC letter described the scrutiny as related to “a non-public inquiry.”

    Reddit, whose 17 billion posts and comments are seen by AI experts as valuable for training chatbots in the art of conversation, announced a deal last month to license the content to Google. Reddit and Google did not immediately respond to requests for comment. The FTC declined to comment.

    AI chatbots like OpenAI’s ChatGPT and Google’s Gemini are seen as a competitive threat to Reddit, publishers, and other ad-supported, content-driven businesses. In the past year the prospect of licensing data to AI developers emerged as a potential upside of generative AI for some companies.

    But the use of data harvested online to train AI models has raised a number of questions winding through boardrooms, courtrooms, and Congress. For Reddit and others whose data is generated by users, those questions include who truly owns the content and whether it’s fair to license it out without giving the creator a cut. Security researchers have found that AI models can leak personal data included in the material used to create them. And some critics have suggested the deals could make powerful companies even more dominant.

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  • Biden Executive Order Bans Sale of US Data to China, Russia. Good Luck

    Biden Executive Order Bans Sale of US Data to China, Russia. Good Luck

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    US president Joe Biden will sign an executive order on Wednesday aimed at preventing a handful of countries, including China, North Korea, and Russia, from purchasing sensitive information about Americans through commercial data brokers in the United States.

    Administration officials say categories of sensitive data, including personal identifiers, precise location information, and biometrics are being amassed by what the White House is calling “countries of concern,” vital tools for waging cyberattacks, espionage, and blackmail operations against the US.

    Biden administration officials disclosed the order to reporters in advance on a Zoom call Tuesday and briefly took questions on the condition they not be named or referred to by job title.

    The order will have few immediate effects, they said. The Justice Department will instead launch a rulemaking process aimed at mapping out a “data security program” envisioned by the White House. The process affords experts, industry stakeholders, and the public at large an opportunity to chime in prior to the government adopting the proposal.

    White House officials said the US Attorney General would consult with the heads of the State and Commerce Departments to finalize a list of countries falling under the eye of the program. A tentative list given to reporters during Tuesday’s call, however, included China, Cuba, Iran, North Korea, Russia, and Venezuela.

    The categories of information covered by the program will include health and financial data, precise geolocation information, and “certain sensitive government-related data,” among others, the officials said. The order will contain several carve-outs for certain financial transactions and activities that are “incidental” to ordinary business operations.

    It’s unclear to what degree such a program would be effective. Notably, it does not extend to a majority of countries where trafficking in Americans’ private data will ostensibly remain legal. What’s more, it’s unclear whether the government has the authority or wherewithal (outside of an act of Congress) to restrict countries that, while diplomatically and militarily allied with the US, are also known to conduct espionage against it—close US ally Israel, for instance, which the US accused in 2019 of planting cellphone-spying devices near the White House and has served as an international marketplace for illicit spyware; or Saudi Arabia, which availed itself of that market in 2018 to covertly surveil a Washington Post contributor, later abducted and murdered by a Saudi hit squad.

    If China, Russia, or North Korea moves to obtain US data from a third party in one of the more than 170 countries not on the US government’s list, there may be little to prevent it. US data brokers need only take steps to ensure overseas customers follow “certain security requirements” during the transfer, many already required by law.

    The restrictions imposed by the executive order, said a White House official, are meant to protect against “indirect transfers of data.” But in effect, that means data brokers simply need to obtain “some type of commitment”—an “understanding”—from overseas customers regarding the possibilities of the data being sold or transferred down the line.

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